Nama Sale of London Hotels

paul71

http://www.independent.ie/business/irish/new-leaders-needed-in-banks-or-trust-wont-be-restored-aynsley-

It appears to be the first good result for Nama, the sale acheived the settlement of the full loan amount plus interest. The article says Nama aquired the loans at a discounted rate from Anglo and AIB, I would be interested to know what the actual discount on the aquisition of the loans was, (if anyone knows where that information could be found).

I hope there are a few more succeses like this but suspect that the only ones will be related to loans on property purchased abroad, which probably amount to a small proportion of the properties and loans aquired by Nama.

http://www.independent.ie/business/irish/nama-sells-off-over-euro800m-worth-of-london-hotel-loans-2891988.html

Dob74

I wouldnt see this as a success. Selling blue chip properties in this climate is a mistake.
The loss made by the developer gang is going to be made up by Anglo and AIB, both owned by the taxpayer.
Why is NAMA so serective? Just lay it all on the line.

I dont have the link but i think the hotels cost £1.5 billion to buy. So ireland inc has lost over 50% on this deal.

Armin_Tamzarian

I think you posted the wrong link.
I presume this is what you are referring to.

Not sure if I agree that this is a mistake.
Probably better for Nama to concentrate on selling off their UK property rather what they've got in Ireland.
I think that Nama auction in Cork only sold 2 properties.
At least over there they can hope to get a reasonable price for what they are selling.

paul71

Dob74 wrote: »

I wouldnt see this as a success. Selling blue chip properties in this climate is a mistake.
The loss made by the developer gang is going to be made up by Anglo and AIB, both owned by the taxpayer.

I don't beleive this to be the case at all. The loans where aquired from Anglo and AIB at a discounted rate and were settled at their full value by the proceeds of the sale. The loss that the owners made on the asset transfer is in no way a liability for for AIB or Anglo, how could it be, they they defaulted on the loan repayments and the banks took posession of the properties as the sureities on the loans.

NAMA has made a profit on this transaction by the amount of the differnce of the sale proceed and the discounted price paid for the loan.

Thanks, to the second responder, I did indeed post the wrong link and you found the one I intended to post.

Good loser

The discounts on these loans were probably very small.

Yahew

Good loser wrote: »

The discounts on these loans were probably very small.

They were probably all discounted the same - Irish and English loans, for every developer in trouble.

harpsman

Yahew wrote: »

They were probably all discounted the same - Irish and English loans, for every developer in trouble.

Wrong.The "haircuts" on loans aquired by NAMA varied from 20-80%. These ones were probably at lowere end for obvious reasons.A plot of bog outside Strokestown would be at upper end.

AlekSmart

Dob74 wrote: »

I wouldnt see this as a success. Selling blue chip properties in this climate is a mistake.
The loss made by the developer gang is going to be made up by Anglo and AIB, both owned by the taxpayer.
Why is NAMA so serective? Just lay it all on the line.

I dont have the link but i think the hotels cost £1.5 billion to buy. So ireland inc has lost over 50% on this deal.

Irrespective of this particular outcome,the NAMA secrecy issue is going to become more relevant to us all as it goes forward.

This Secrecy clause is a direct throwback to Fianna Fail and should be ended NOW. :eek:

harpsman

paul71 wrote: »

I don't beleive this to be the case at all. The loans where aquired from Anglo and AIB at a discounted rate and were settled at their full value by the proceeds of the sale. The loss that the owners made on the asset transfer is in no way a liability for for AIB or Anglo, how could it be, they they defaulted on the loan repayments and the banks took posession of the properties as the sureities on the loans.

NAMA has made a profit on this transaction by the amount of the differnce of the sale proceed and the discounted price paid for the loan.

Thanks, to the second responder, I did indeed post the wrong link and you found the one I intended to post.

And as the previous poster said if these loans were purchased from AIB and Anglo at a discount then AIB and Anglo(you and me) make a loss.
Seems pretty straightforward to be honest.

Yahew

harpsman wrote: »

And as the previous poster said if these loans were purchased from AIB and Anglo at a discount then AIB and Anglo(you and me) make a loss.
Seems pretty straightforward to be honest.

How does anybody make a loss if the hotels are now being sold in a london market at a profit?

ResearchWill

NAMA did not sell the hotels, NAMA sold the loan, they never had the hotels to sell, a major shareholder in the company that owns the hotels is trying to stop the loan transfer, I believe.

Nody

There is also the question if this was the bad or good part of the loans they took over (remember NAMA took over bad loans and some good loans to compensate for bad loans by the money coming in).

thebman

There is no way it can't make a profit according to some people on here at the time it was introduced so there will be a lot of red faces if it doesn't and someone digs up some old threads :P

toexpress

ResearchWill wrote: »

NAMA did not sell the hotels, NAMA sold the loan, they never had the hotels to sell, a major shareholder in the company that owns the hotels is trying to stop the loan transfer, I believe.

That was my understanding too. I would imagine with the buyers in question the major shareholder should start packing his office up now because it wont be his that much longer.

Best of luck to him with stopping the loan transfer

easychair

An interesting article in today's Irish Times says that the developers don't have to pay back their original loan amounts to NAMA, but only have to pay back to NAMA the amounts NAMA paid to the banks for the loans.

http://www.irishtimes.com/newspaper/opinion/2011/1005/1224305257468.html

Naturally, the original loan amount will have to be paid to the banks by the Irish taxpayer, in the guise of "recapitalising" the banks.

SBWife

Reading that Vincent Browne article it seems to me that both statements are true. Brian Lenihen said that transferring the loan to NAMA didn't change the amount owed. What wasn't included in that particular statement was that NAMA would subsequently review the loans and business plans associated with each loan and could subsequently restructure the terms (including the principle of the loan). It would appear from his statements that Harry Crosbie's business plans associated with his NAMA transferred loans were approved (NAMA did provide Working Capital for the completion of some projects) and that certain loans were restructured.

The PR person's statement is very simple NAMA's priority is not to take losses on the loans. They have very little ability to take losses as the organisation is funded primarily by debt and has comparatively little equity. At the end of 2010 €456m in equity on a balance sheet of €29.6b.